Thursday, July 09, 2009

Deception About Adam Smith

Marivic Butod writes in Thinking Made Easy (it seems to be an essay supplier for Asian students) HERE: “International Business”

“The market economy seems a very effective type of economy as it offers economic freedom, and limited government intervention in terms of trade. It has been reported that it follows theory of Adam Smith, that of the free market economy, where the allocation of resources is determined by the ‘invisible hand’ of the price mechanism, and is commonly associated with capitalism”.

CommentIf this is typical of the quality of Thinking Made Easy essays, I despair for the thousands of Asian students who are indoctrinated with extravagant myths that Adam Smith said anything like “the allocation of resources is determined by the ‘invisible hand’ of the price mechanism”.

I offer Marivic Butod a thousand dollars if he can cite from Smith’sWealth Of Nations 1976, or Moral Sentiments 1982, any sentence that Smith wrote in the Glasgow Edition (published by Oxford University Press), where Smith makes such a statement as the ‘invisible hand of the price mechanism’.

That, of course, excludes secondary sources by modern economists who make similar assertions about Smith to Marvic Butod's. Like Marivic Butod, they haven’t read either Wealth Of Nations or Moral Sentiments.

Of course, thinking is made easy if you can just make it up, charge for it, and nobody is the wiser among innocent customers. Caveat Emptor.